Well I have to say I’m maybe seeing a variety of spinoffs here.
The MF on its own sure does seem to be effective.
I do remember (now that I’m looking at this again) that the only reason for not following Wilder’s TBP system was the time involved as touched upon above. Calculating the initial entry MF is easy. It’s once you’re in the trade and then having to figure out whether you should still be trading in one direction or the other is where it starts getting a bit complicated and time consuming. Possibly not an issue if you’re only trading one instrument with this. But certainly an issue (for me anyway) in having to do all this at midnight every night (even an hour later when the UK changes its clocks) i.e. that’s when the daily bars tick over on my platform. With my core trading system I pretty much fudge things anytime from around 10h00 my time which is manageable (that’s when the NYSE closes). Anyway. Just remembering now why this was such a ball ache.
The above being said: for sure this thing would have resulted in profitable trades for the last few days on just about everything I’ve looked at. This without holding any positions open i.e. simply go short as indicated by the MF and TP at the next lowest pivot level. This with even ignoring RSI(2). The better trades would of course have been NOT going short at market but placing limit sell orders at the pivot.
There is a lot to work with here I think.
I don’t think I’m going to bother back testing this stuff. It’s something I very rarely do. I prefer simply jumping in and going for it. So I’ll see how simple or complicated I wish to make this.
At this point I’m leaning toward the following:
Long or short as per the MF BUT the direction as indicated by the MF must be in agreement with where price opens relative to the daily pivot. In other words: IF the MF indicates a short trade then price must open BELOW the pivot. If these conditions are true then a limit sell order is placed at the pivot. If such order is executed then TP is the next lowest pivot (which in this case would obviously be S1). This ignoring RSI(2). So this is one possibility.
Next possibility and based on RSI(2). If the MF indicates a short trade and if RSI(2) is still indicating a valid short trade as per my core trading system then limit sell orders are placed at R3 and TP is R2.
In both cases above: trades are closed just before the close regardless of PL.
Third possibility of course is trading pure Wilder TBPS.
One thing of interest and something I noted YEARS ago:
You will note of course that the MF (and therefore Wilder’s TBPS) has a long bias. No surprise there let’s face it. For this reason it’d be useless on FOREX (no surprise there either).